Affordable Care Act (ACA): Future Care Cost Control in Claims



By: Richard J. Joppich

Kitch Drutchas Wagner Valitutti & Sherbrook, PC


Executive Summary

Evidentiary rules historically have precluded reference to insurance in an attempt to reduce damages in personal-injury litigation. The bases of this long-standing rule is eroding with the development of mandatory health insurance coverage through the Affordable Care Act (ACA), to the point that some courts are recognizing the realities of modern healthcare and health insurance coverage and allowing reference to and evidence of the impact of the ACA on economic-medical-expense-damage calculations.


“The court finds that health insurance provided under the Affordable Care Act is reasonably likely to continue into the future and that its discussion before the jury is not precluded . . . Accordingly, what medical care and therapies would be provided by insurance through the ACA can be discussed/argued at trial.”

So states a recent 2015 order from the Kent County Circuit Court in Donaldson v Advantage Health Physicians, PC, et al. The cost of future-economic damages for medical care should be limited to costs of coverage and out of pocket limits under the Affordable Care Act (hereinafter “ACA”).

Historically, mentioning the availability of healthcare coverage in front of a jury has been strictly taboo. Evidence of future healthcare costs associated with a claim, in general, has been the amount a healthcare provider charges for required services or devices made necessary by the claimed injury regardless of the existence of health insurance coverage.

The evidentiary preclusion of information concerning health insurance arose out of the fact that not every individual claimant had such coverage and, even if they did, it would be speculative to assume they would continue to have coverage for healthcare costs into the future. As a result, the claimant would be entitled to full recovery of future medical costs. The ACA, however, has changed this paradigm.

Mandated Healthcare Coverage

Maintaining minimum essential healthcare coverage under the ACA is mandatory for almost everyone. There is no longer the historical choice of whether or not one wishes to obtain coverage. The constitutionality of this mandate was upheld by the United States Supreme Court in Nat’l Fed’n of Indep Bus v Sebelius. The ACA again was affirmed by the Supreme Court in June 2015, when it was challenged on the basis of its precluding tax-credit subsidies to the residents of Michigan, where Michigan failed to set up an insurance exchange.

Insurers under the ACA are precluded by federal statute from denying coverage or increasing premiums based upon age, disability, preexisting conditions, and several other factors. Additionally, the insurer providing coverage under the ACA has no right of recovery from the proceeds of any third-party personal-injury-liability payment. Yet, insurers are required by law to provide certain minimal coverage benefits for services such as ambulatory patient services, emergency services, inpatient hospitalization, maternity and newborn services, mental health and addiction services, prescription drugs, rehabilitation services and devices, laboratory studies, preventative, wellness, and chronic-disease care, and pediatric services.

From the patient side, in addition to the cost of their premiums, which entitles them to the essential benefits above, the individual out‑of‑pocket expense per year is capped at $6,850 for 2016.

Under the mandatory ACA coverage requirements, any future healthcare expense damages claims should be limited to the total potential out‑of‑pocket limit, plus any non‑covered expenses. These amounts pale in comparison to the typical plaintiff/claimant life care planner’s listing of needed services and assessment of total, unreduced charges for those services.

In some circumstances, an additional amount for providing the claimant with the platinum level coverage under the ACA may provide necessary claim-related benefits. Thus, the difference between the premium the claimant otherwise would be required to pay for coverage and the premium for the higher level of coverage may be added to the equation for future cost totals.

Court Views On Allowing Evidence Regarding Benefits Under The ACA

Courts around the country are beginning the trend of allowing evidence at trial regarding the effect of the ACA on future damages as part of direct evidence of permissible damages. The ACA ensures plaintiffs will have insurance for future medical care needs, and since the ACA has survived constitutional challenges and multiple efforts at repeal and modification, it is reasonably certain to continue well into the future. Therefore, it is appropriate to consider ACA benefits in calculating reasonable future life care plan needs. ACA evidence is allowed as the law of the land.

Several courts across the country have prohibited direct evidence of the ACA on the issue of damages at trial, but have permitted use of the ACA to reduce post-trial verdicts before judgment. The question concerning the introduction of the ACA as evidence of medical costs was left to the trial court to decide as issues arose in Donovan v Phillip Morris USA, Inc.

In a California case, Aidan Leung v Verdugo Hills Hospital, the court set out three prerequisites to using future-insurance benefits such as the ACA in damage assessments by a life care planner: (1) link the coverage to items of care that are required in the life care plan; (2) demonstrate with reasonable certainty that plaintiff will have the coverage; and (3) show the coverage can be demonstrated to be in existence for a reasonably certain time period into the future.

Other courts, however, have been harsher in precluding the use of the ACA for purposes of future-damages reduction. In Deeds v University of Pennsylvania Medical Center, mention of coverage benefits in questioning a life care planner required a new trial. In Vasquez-Sierra v Hennepin Faculty Assoc, and Halsne v Avera Health, the ACA was not allowed to reduce potential awards to plaintiff and the Minnesota courts were reluctant to change the collateral-source rules unless legislated. In Caronia v Phillip Morris USA, the defense was not allowed to argue ACA reduction of future-monitoring costs to the plaintiff (although medical-monitoring claims ultimately were not recognized in the jurisdiction). In Brewster v Southern Home Rentals, the court found that the possibility of future ACA coverage was too speculative to be relevant.


Whether it is through direct evidence of the cost of coverage and out-of-pocket expenses for purchase of ACA benefits for a claimant, or use of a plaintiff’s failure to obtain coverage as a failure to mitigate damages, or even ACA use post-verdict in reduction of actual future costs of care, the ACA should be a large factor in damage-management strategies in claims.

The certainty of mandatory health insurance coverage under the ACA for injured claimants should, and in several instances has, worked to reduce and control runaway future healthcare cost claims.

Categories: Volume 7-3

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